"This is not going to happen. Iran wants to have nuclear fuel cycle," the official told Reuters on condition of anonymity.

Iran resumed activities at the Isfahan uranium conversion plant on Monday. Despite U.S. and EU calls that it not resumes work there, Tehran on Wednesday broke all the U.N. seals and made the facility fully operational.

The Financial Times said the proposal would involve shipping South African uranium yellowcake to Iran for conversion into uranium hexafluoride gas (UF6) which would then be shipped back to South Africa for enriching into nuclear fuel.

The newspaper said the proposal was designed to allay fears that Tehran could use its facilities to develop nuclear weapons.

Ali Aghamohammadi, spokesman for Iran's Supreme National Security Council, said the idea, previously suggested by Russia, was part of Iran's proposals package to France, Britain and Germany to break the country's nuclear impasse, reports Reuters.